It’s Time for Microsoft to Go Private

ROBERT PLANT: Priority number one for Microsoft’s next leader is clearly to change the culture. The mistake would be to try to do this in an incremental style or to try yet another organizational realignment. These approaches to cultural change would just be diluted within the vastness of Microsoft’s labyrinthine structures and the momentum built up over the past 30 years would continue.
One bold option the next CEO can take in order to significantly change the culture is to go private. It would take an extraordinary CEO, as clearly taking a company with a market capitalization of $283 billion back into the private sector would be a complex financial engineering operation; easy no, but achievable yes. This move would change the entirety of the technology landscape and give the new leader the freedom to act without Wall Street’s oversight.

Microsoft is a behemoth. However, its revenues of $77 billion are less than that of Cargill’s, America’s largest private company, who itself operates in 64 countries and employs 142,000. Granted this deal would be an order of magnitude greater than the recent $25 billion Dell privatization. But like Dell, Microsoft would be able to use it as an opportunity to fix its culture and adjust its business model.

Microsoft clearly has inspiring ideas but is poor at predicting market sentiment and often unable to react at market speed. Case in point is the Surface, which originated as an idea in 2001 but was not released as a product until October 2012. By going private, they can slim down, divest aspects of the business, and assert a startup culture of adaptability, flexibility and speed to market.

Privatization may be radical, but sometimes the intervention needs to be drastic for sustainable and transformative regeneration to take place.

Robert Plant (@drrobertplant) is an associate professor at the School of Business Administration, University of Miami, in Coral Gables, Fla.